Rinehart’s Reach

By Sharona CouttsJuly 6, 2012

With or without the media, mining magnate Gina Rinehart can be heard in Australia’s corridors of power. Why can’t taxpayers get more information about those conversations?

Amidst glittering jewels, a rainbow of saris, and hundreds of elegant guests, mining magnate Gina Rinehart's smiling face fleetingly appears in a video of the June 2011 wedding of one of India's billionaire heiresses.

The bride was the granddaughter of the head of GVK Group, which later bought a $1.26 billion stake in Rinehart's Queensland mines. The video shows Rinehart standing near Bollywood megastar Shah Rukh Khan as he embraces members of the wedding party. India's wedding blogs later hyperventilated that this was one of the "most spectacular weddings" of the year.

Australia has always had difficultly, along with the UK, in ensuring adequate transparency involving the activities of parliamentarians.

Keep watching and there, cutting a somewhat less glamorous figure than the Indian glitterati, is Australian senator Barnaby Joyce. Joyce and two other members of federal parliament — Julie Bishop and Teresa Gambaro — also attended the event on Rinehart's tab, accepting free flights from Perth to Hyderabad.

All three politicians declared those gifts in the parliamentary register, as required by law. Joyce later gushed that the trip was "absolutely mind-blowing," and that he'd met "India's Brad Pitt".

But what neither Joyce nor the others would tell The Global Mail or other publications, is exactly who else they met on the trip, and whether it was on Rinehart's behalf.

"I do not divulge or discuss the contents of private conversation or events," said Teresa Gambaro, federal MP for Brisbane, in an email to The Global Mail.

Much has been made of Rinehart's aggressive moves to join the board of Fairfax Media; she had built up almost 19 per cent of the company's stock, until her sale of some 86.5 million shares on July 5. According to Fairfax, a deluge of messages from the public shows a widespread anxiety that Rinehart would turn the pages of The Age and The Sydney Morning Herald into pro-mining, anti-environment rags.

But regardless of what becomes of Rinehart's moves on the media (in 2010 she took a 10 per cent stake in Network Ten and even after this week's sale, she retains 15 per cent of Fairfax shares), the billionaire's reach already extends to state and federal governments via her relationships with politicians, hired lobbyists and financial contributions to political parties. It's the same for other mining companies — and, for that matter, companies in other industries and other wealthy individuals. And across the board, due to Australia's anaemic laws on transparency in government, much of what happens in these meetings remains hidden from public view.

"Australia has always had difficulty, along with the UK, in ensuring adequate transparency involving the activities of parliamentarians," according to Rick Snell, senior lecturer in law at the University of Tasmania and an international expert on government transparency. Snell called Australia's disclosure laws "thin and easily evaded" — especially compared to the strict rules that operate in other countries, such as Canada and the United States.

Yet those pasty little policies do give some insight into Rinehart's encounters with our elected representatives and public servants, and how she and other powerful players can gain direct access to decision-makers, who don't have to disclose anything but the scantest details to the public.

Here's what they show.

ACCORDING TO THE REGISTERS of members' and senators' pecuniary interests, at least eight federal politicians have accepted flights from Rinehart's company, Hancock Prospecting, since June 2010.

Among them is Martin Ferguson, Minister for Resources, Energy and Tourism, who flew on a plane chartered by Hancock Prospecting to officially open a "test pit" at Rinehart's massive coal project in Queensland's Galilee Basin in November 2010.

"Given the remoteness of many of Australia's resources projects, it is appropriate and cost efficient for [the] Federal Minister to travel to them by air charters provided by mine operators," Ferguson's spokeswoman told us in an email. She said the project could lead to billions of dollars in investments, and thousands of jobs, and underlined that Ferguson had fulfilled his legal obligations to declare the gift.

That seems fair enough — though reasonable people might differ on whether we could afford to pay for our ministers to fly to mine sites — but the spokeswoman ignored our question about any other meetings held between the minister and Rinehart or her representatives.

Supplied

Rinehart and Barnaby Joyce in India

We asked for similar information from Teresa Gambaro, who accepted not only Rinehart's sub-continental munificence, but also disclosed a visit to the Galilee Basin project a couple of weeks after the "spectacular" wedding. Gambaro's spokesman didn't answer our questions about who the MP met when she went to the mining site, or what was discussed. Indeed, we asked the simple question: Why did Gambaro visit the site?

No answer. "I have nothing further to add to what is already on the public record," Gambaro said, referring to earlier media coverage of the trip, which noted that Australian politicians had attended.

We got a similar response from Julie Bishop, deputy leader of the federal Opposition, who also went on the wedding jaunt.

Bishop makes a habit of hopping around the country on the tab of mining companies.

In January 2011, she declared that Clive Palmer's company, Mineralogy, had flown her from Brisbane to Gatton and back. And just days before the Indian trip, Bishop flew from Perth, to Cloudbreak, Newman and Karratha, courtesy of the Chamber of Minerals and Energy of Western Australia — the umbrella group for the mining industry in WA. She's even flown to Papua New Guinea as a guest of Oil Search Ltd, which operates all of PNG's oil and gas fields, according to the company website, and has a board packed with former heavyweights of corporate Australia.

What did Bishop talk about with these people? Who did she meet?

Bishop, who answered our email herself, declined to give more information about the Rinehart flights. "As I have met all my Parliamentary obligations in terms of disclosure, I have no further comment," she wrote.

Transparency is at least one break on the potential distortions that can arise when people with money and influence have much more say on government affairs than the rest of us.

Barnaby Joyce claimed in a report to the Special Minister of State, Gary Gray, that the purpose of his Indian trip was to "meet with executives of Indian infrastructure, energy and resource companies with an interest to invest in Australia" and to establish trade between the two countries.

Okay, who'd he meet?

"Senator Joyce does not release specific details of his diary," the spokesman said.

What? If the meetings were for a public purpose, why shouldn't Joyce disclose information about who he met?

We asked in an email whether Joyce thought it was appropriate for federal politicians to meet with Rinehart's potential business partners, especially at a time when negotiations over billion-dollar investments are likely to have been going on (the wedding was in June; the deal was announced in September 2011). Did this amount, we asked, to effectively lending their official imprimatur to Rinehart's business dealings?

This seems especially relevant because Joyce's filings with the Senate Registry of Interests show that Rinehart's future business partners, Dr. GVK Reddy and his son, Sanjay, footed the bill for Joyce's accommodation. He stayed at the Taj Falaknuma Palace, a hotel where rooms start at $300 a night, and where guests "revel" in luxuries including "Venetian chandeliers, rare furniture, grand marble staircases and gurgling fountains, priceless statues, and objets d'art", according to its website.

But our question was totally ignored.

Mike Bowers/The Global Mail

Martin Ferguson, Minister for Resources, Energy and Tourism.

Contrast this to the situation in the United States, where politicians' schedules are considered public records. Indeed, newspapers there have frequently uncovered stories by examining meeting calendars with subsequent events. The New York Times famously obtained the calendar of Timothy F. Geithner, who was head of the New York Federal Reserve Bank in the lead up to the financial crisis of 2008. Reporters found that Geithner had "unusually close relationships with Wall Street's giant financial institutions" — the very institutions he was supposed to regulate, and ended up helping to bail out.

And what of the many other Australian federal parliamentarians who regularly zoom around in private jets, paid for by other mining companies?

Under current laws, they have no obligation to tell us anything other than the mere fact that they took a flight or accepted a meal or gift. They don't have to tell us why they took the trip, or what they discussed.

"It's totally inadequate," said Peter Timmins, an expert in freedom of information laws. He believes Australian laws should require public officials to disclose what they discuss on such trips.

Timmins also gives short shrift to the notion that conversations that occur on these privately-funded trips are really private.

"People in positions of authority, sure they have a private life, but I would have thought that much of their activity is not private in that sense," he says. "Transparency is at least one break on the potential distortions that can arise when people with money and influence have much more say on government affairs than the rest of us."

For the record, the other politicians who've boarded Gina's jets are Liberal senators Cory Bernardi, Michaelia Cash and Stephen Parry (from South Australia, Western Australia, and Tasmania respectively), and federal member for Wide Bay, Qld, the National Party's Warren Truss. We didn't hear back from their offices despite repeated calls and emails.

In the United States, lobbyists are required to lodge regular reports saying who they work for, who they've met, what they discussed, and how much they were paid. And all that information is freely available online.

The same response — silence — came from the two lobbyists who list Hancock Prospecting as a client, Jeffrey Wall Public Affairs, and Eric Walsh. Neither replied to emails asking what they were lobbying on the company's behalf, who they'd met, and how much they were paid.

It's hard to describe how backwards Australia is in this respect. In the United States, lobbyists are required to lodge regular reports saying who they work for, with whom they've met, what they discussed, and how much they were paid. And all that information is freely available online.

On the topic of cash, Rinehart and her companies have given a sprinkling of dollars to federal political parties. Hancock Prospecting has given $17,500 to the federal Labor Party since 2003, and Rinehart herself gifted $20,000 to the federal Liberal Party back in 1998-9, according to Democracy4sale, a web site administered by the Australian Greens, which tracks campaign donations.

That's not a lot by the standards of Clive Palmer or Graeme Wood (Wood is the philanthropic funder of The Global Mail, and in 2010 made donations totalling $1.68 million to the Australian Greens) but it's more than most punters could contribute to political parties.

MINING EXECUTIVES ALSO meet regularly with state officials, who often have more direct power over mining projects than their federal counterparts.

Hancock Prospecting is among the companies that met with Western Australia's mining minister, Norman Moore, as part of the industry's support for the Australian Prospectors and Miners hall of fame, which was facing closure, according to the minister's media advisor, Jean Stewart.

Stewart said that was the only meeting they had recorded between Hancock and Moore. She said the minister met with lots of people about the hall of fame, but declined to name anyone, or to provide any other details of those meetings, claiming that information could be "commercial in confidence".

She has made no secret of her scepticism about the publisher's charter of editorial independence.

To get information about meetings concerning actual mines, not just the hall of fame, we'd need to lodge Freedom of Information requests, and Stewart said that would require getting permission from all attendees.

Queensland officials also "regularly meet mining company representatives," said a spokesman for the Department of Natural Resources and Mines.

The department keeps records of any meetings involving lobbyists, "including the date of the meeting, the name of the lobbyist, the name of the company the lobbyist was representing, and the names of the departmental officers involved in the meeting," the spokesman said.

But — displaying a marvellous Yes Minister sensibility — he informed us that those records are secret.

(An official from Queensland's Integrity Commission later told us apologetically that we might be able to get that information, but only after filing formal requests.)

TRANSPARENCY MATTERS because Rinehart, and other powerful companies, unions or individuals, can exert enormous power to sway public opinion. They spend millions on TV and cinema advertising campaigns to advocate their positions — think of the efforts the mining industry brought to bear on fighting the carbon tax. Monied interests also run slick public relations machines, with squads of spin doctors, both in-house and on retainers.

Now, Rinehart's making increasingly muscular attempts to shape media coverage directly. Even after selling $50 million worth of Fairfax shares on July 5, she remains its largest single shareholder and continues to seek board seats for "two directors plus an independent out of up to 12 directors on the board". She has made no secret of her scepticism about the publisher's charter of editorial independence.

Public officials who meet with these players have a moral duty to disclose the details of all those meetings, so the public can see the links between lobbying and decisions that are made.

That duty should also be enshrined in state and federal laws, as it is in countries around the world that have shown they're serious about holding public officials accountable.

The Global Mail’s investigative intern, Clare Blumer, contributed research to this report.

I can see how the US system works so much better as they don't have any corruption there.The Aust governing system began from corruption. to expect anything more, or less, seems a tad naive.I think the only option is to 'write-off' the current system and start afresh, with say ... a constitution based on human rights, a treaty with indigenous people, laws the put the health, welfare and rights of people and the land first and foremost, with 'business' much further down the list.

July 7, 2012 @ 9:36am

by Paul

Rinehart's Reach: Another great article from Global Mail. I was unaware just how far behind other countries we are in public disclosure. Not much hope of getting our politicians to change the rules that serve them so well, but shining some light upon them confirms my opinion that they are a shabby and venal bunch.

July 9, 2012 @ 12:45pm

by Meryl

Good article thankyou Clare Blumer. I agree this information should be made public

July 9, 2012 @ 12:56pm

by Pam

Thank you for such an informative article. What hope does democracy have against such people/groups with such self interested attitudes and with the enormous amounts of money at their disposal. We feel disenfranchised!

July 9, 2012 @ 2:26pm

by Peter

Frankly, as far as politicians are concerned, I am happy with the current system of recording such "adventures" on the parliamentary register. I am not really interested in the detail - politicians are sufficiently in the public eye that any influences as imagined here soon become apparent. Ultimately they will be judged by their public utterings and public actions. Having worked in business for over 30 years lobbying is part of life.

Again, I am not overly concerned about powerful people influencing public opinion. It has always been so and so often is unsuccessful.

But thanks for the article.

July 9, 2012 @ 4:21pm

by Wayne

I would then have to ask what then does the staggering amount of $1.68 million get your philanthropic funder considering his donation far exceeded our miners.

July 11, 2012 @ 9:55am

by Tim

Excellent investigative journalism - just the sort that Rhinehart would not appreciate nor condone. Let there be more!

July 16, 2012 @ 9:58pm

by shane

Thanks heaps G.M. , I reckon your membership number is about to go viral. My family just signed up! Heart of stone thing.

July 23, 2012 @ 5:27pm

Show previous 8 comments

by three dogs

I find this type of article extraordinarily undergrad. Could be my age! What is the author's point?

There doesn't seem to be anything here that does not apply to every other business, union or green interest.

Global Mail would benefit from more diverse opinion, generate debate - look at the comments - universally positive! That should alert a good editor to the fact they are preaching to the converted, rather a waste of time and funds I suggest.

July 26, 2012 @ 8:29pm

by Mark

This story could have been more explosive if it was focused on all kinds of political influence - including donations. Detailing by how much politicians are indebted to benefactors is not only very important it is vital to a thriving democracy. This is one area of political reform that needs to be taken seriously. I dare either side of politics to be brave enough to clean up politics for the benefit of the whole nation. We should demand it.

September 3, 2012 @ 9:31pm

by Christine Hales

I agree with you Mark it could have been more explosive with more detail regarding political donations. It amazes me how little attention or public response this kind of article attracts. I'm scared for this country and its ignorant voting public who believe the news is what they see on TV